MFs resembling earlier schemes will not be allowed; Damodran

Mumbai, June 15 (UNI) ''No new schemes with resembelance to existing Mutual Funds will be allowed on the BSE,'' said the Securities and Exchange Board of India (SEBI), Chairman, M Damodaran, at the two-day Mutual Funds Summit 2006 organised by Confederation of Indian Industries here.

Citing failure of Mutual funds to communicate market risks properly to investors Mr Damodaran said, ''This is an industry which communicates very well, but it still has not communicated clearly to those who hold the money.'' The SEBI Chairman expressed concern over confusion that comes with the standard disclaimer on Mutual Funds that 'returns are subject to market risks' and said it needs to be elaborated to the investors since the market risk' is not properly communicated.

Over-communication like reading bulky offer documents should also be avoided.

The SEBI chief promised to work out ways and means to make mutual funds more interesting from an investor's perspective.

Mr Damodaran on the current issue of volatility in the market said, ''Local and International factors are behind this volatility and market would stabilise soon given the strong fundamentals of the Indian economy.'' He asked investors to look forward to investments in the overseas funds and said, he is working with the External Affairs Ministry to frame norms for the same.

Touching on the gold market he said he will soon address the Gold Exchange Traded Funds (ETF).

UNI VS MJ VKG2034